Farm gate value

This article is about the specific valuation of an agricultural product as it leaves an agricultural operation. For sales of agricultural products directly from a farm to consumers, see Farm gate marketing. For other uses of the term "farm gate", see Farm Gate (disambiguation).

The farm gate value of a cultivated product in agriculture and aquaculture ^[1] is the market value of a product minus the selling costs (transport costs, marketing costs).^[2]

The market value is not the same as the price farmers get for their product, as (if an auction is used), the value they get per weight may be well below the market price. In some cases, the value they get per weight may even be below the breakeven price.^[3][4]

When selling by auction, the price the farmers get for their product is typically lower than the price they get if they sell directly to the consumer (as they are able to set this price themselves).^[5]

The farm gate value is also lower than the retail price consumers pay in a store as it does not include the additional costs the store makes (shipping, handling, storage, marketing) nor the profit margin the involved companies ask.

References

1. Value of Agricultural Commodities Produced
2. Economics and Marketing: Farm Gate Values for Farm-Raised vs Purchased Calves
3. Marketing Grain in Low Price Market
4. "Breakeven Selling Price and Breakeven Volume". Archived from the original on 2017-06-08. Retrieved 2018-04-22.
5. Farms that Sell Directly to Consumers May Stay in Business Longer

• Definition according to the OECD Glossary of Statistical Terms